The Government’s customs proposals do not solve the problem

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Series Details 01.05.18
Publication Date 01/05/2018
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​United Kingdom Ministers within the Brexit sub-group of the Cabinet met on the 2 May 2018 to clarify what the UK would seek in terms of the future customs arrangement with the EU. UK Prime Minister Theresa May had said that the UK would seek a 'customs partnership' with the EU.

However, the government's position was made more difficult by divisions within the Conservative Party (and the wider country) as to the path forward.

The author of this blog from the Institute for Government wrote that the two proposals the Government had floated were both unworkable.

The first proposal was for a highly streamlined customs arrangement, now dubbed maximum facilitation and the second was for a customs partnership.

Further information

During the Report Stage of the European Union (Withdrawal) Bill in the House of Lords, the UK government was defeated on the 18 April 2018 on a proposed amendment introduced by Lord Kerr to keep the UK in a customs union when it left the EU.

Those backing it were concerned that leaving the customs union would mean a fall in UK exports and argued it would be difficult for the UK on its own to make trade agreements with super powers.

Members against the amendment responded saying that being inside the EU customs union puts the UK at a disadvantage and supporters of staying in it were making a political point rather than one based on trade. Members for the change said they were trying to get the best Brexit deal for the UK and its future relationship with the EU, not undo Brexit.

The government said it would not accept the change, arguing that staying in the customs union would make the UK bound by the EU’s tariffs and in a worse trade position.

A group of senior anti-Brexit MPs from various political parties from the Liaison Committee of MPs brought forward a non-binding Motion to the House of Commons on the 26 April 2018:

That this House notes that the EU is the UK’s largest export market for goods, accounting for a total of £145bn of exports and £241bn of imports in 2016; further notes the Government’s expressed aim to secure the freest and most frictionless possible trade in goods between the UK and the EU after 29 March 2019; notes the importance of frictionless trade without tariffs, customs or border checks for manufacturers and businesses across the country who trade with the EU; further notes that the free circulation of goods on the island of Ireland is a consequence of the UK’s and Republic of Ireland’s membership of the EU Customs Union; in addition notes the Government’s commitment to (i) in the UK-EU joint report on progress during phase 1 of the Article 50 negotiations, the maintenance of North-South cooperation and the all-island economy on the island of Ireland, (ii) the Belfast Agreement implemented in the Northern Ireland Act 1998 remaining a fundamental principle of public policy and (iii) the continuation of unfettered access for Northern Ireland’s businesses to the whole of the UK internal market; and therefore calls on the Government to include as an objective in negotiations on the future relationship between the UK and the EU the establishment of an effective customs union between the two territories.

However, to forestall this a Downing Street spokesperson on the 23 April 2018 made clear that 'We will not be staying in the customs union or joining a customs union'.

Ministers within the Brexit sub-group of the Cabinet were due to clarify what the UK would seek on the 2 May 2018. UK Prime Minister Theresa May had said that the UK would seek a 'customs partnership' with the EU.

The Institute for Government

The Institute for Government is an independent charity in the United Kingdom working to increase government effectiveness.

It works with all the main political parties at Westminster and with senior civil servants in Whitehall. It provides evidence based advice that draws on best practice from around the world.

The Institute for Government is a registered charity in England and Wales (Registered Charity No.1123926).

The charitable objectives of the Institute are:

+ The advancement of education in the art and science of government in the UK for the benefit of the public and on a non-party political basis;
+ The promotion of efficient public administration of government and public service in the UK by providing programmes of education, training, research and study for the public benefit and on a non-party political basis.

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